We’re a couple weeks late to this one, but it deserves more attention than it received. As the Washington Post first reported, a federal judge has found that the IRS violated federal law 42,695 times when it handed over confidential taxpayer addresses to ICE last summer. But the raw number, staggering as it is, undersells how absurd this whole thing was. The details of how it happened are so much worse.
Federal law has a pretty basic safeguard built in: before the IRS can hand over a taxpayer’s home address to another agency, the requesting agency has to provide the name and address of the person they’re looking for — specifically to prevent the government from using tax records as a fishing expedition against people it hasn’t already identified.
Can you guess how the Trump IRS’s actual verification process worked when ICE wanted addresses? I’m betting you absolutely can.
The judge, U.S. District Judge Colleen Kollar-Kotelly, laid it out in devastating detail. When ICE sent over its massive datafile of 1.28 million records, the IRS ran two different matching processes. For requests where ICE included a Social Security number, the IRS used something called “TIN Matching” — which checked that the name and SSN matched IRS records. What TIN Matching did not do was verify that ICE had actually provided a real address. The only address-related check was an automated filter that looked for whether the address field contained something resembling a zip code — meaning, any five-digit or nine-digit number.
That was it. That was the safeguard.
As Judge Kollar-Kotelly pointedly observed:
A zip code is not an address, and a zip code proxy, as the IRS would define it, might as well be a set of random numbers. For instance, ICE could have submitted a request with an “address” like, “Don’t Care 12345,” or, “00000,” and still received a taxpayer’s address through the IRS’s TIN Matching process.
And this was the process used for the overwhelming majority of the disclosures. Of the 47,289 taxpayer addresses the IRS shared with ICE, 90.3% — those 42,695 — went through TIN Matching, the process that never actually checked the address. Only 9.7% went through a process that bothered to verify ICE had provided a matching address.
So when the IRS’s own Chief Risk and Control Officer, Dottie Romo, filed a supplemental declaration with the court admitting the agency “may have supplied last known addresses to ICE” in cases where the data was “either incomplete or insufficiently populated,” that was putting it generously. The judge’s opinion catalogs what ICE actually submitted as “addresses” in many of these cases:
In other words, the IRS not only failed to ensure that ICE’s request for confidential taxpayer address information met the statutory requirements, but this failure led the IRS to disclose confidential taxpayer addresses to ICE in situations where ICE’s request for that information was patently deficient. The IRS, for example, disclosed to ICE the last known addresses for taxpayers in situations where ICE supplied an “address of the taxpayer” in its request that contained “language indicating that the address was not complete, such as ‘Failed to Provide,’ ‘Unknown Address,’ or ‘NA NA.’” ….The IRS also disclosed to ICE the last known addresses of taxpayers where the ICE-supplied address was missing essential information, such as “a street name or street number.” … Still more, the IRS disclosed to ICE the last known addresses of taxpayers where the ICE-supplied address “referred to, described, or named specific locations”—examples of which are “jails, detention facilities, or prisons”—and “the corresponding city, state, and zip code” for those locations, but did not include “the street names and street numbers where the buildings or facilities are located.”
“Failed to Provide.” “Unknown Address.” “NA NA.” The system was designed not to catch these deficient requests. The TIN Matching process, as the judge noted, “was not designed to identify the additional types of data insufficiencies.” Of course it wasn’t. Because the process never looked at the address field in any meaningful way to begin with.
Nina Olson, founder of the Center for Taxpayer Rights (which brought the suit), told the Washington Post there was no precedent for anything like this:
“I don’t know of any opinion about the IRS like this. The kinds of mass requests that are coming in are unprecedented.”
And then there’s the timeline of what happened after the government figured out what it had done, which is deeply disturbing as well. The Department of Treasury identified the problems on January 23, 2026. That very same day, it notified DHS. Also on that very same day, the sole ICE official who had access to the illegally disclosed taxpayer data gave two additional ICE officials access to it. The stated reason was “for the purpose of allowing [them] to create an adequate system of safeguards for the data.”
So on the day they found out the data was obtained in violation of federal law, the first move was to give more people access to the illegally obtained data.
And when did the government get around to telling the court and the plaintiffs about these 42,695 violations of federal law? Nearly three weeks later, on February 11. As the judge noted, Defendants “informed DHS right away, but they waited nearly three weeks to inform Plaintiffs and the Court.” The opinion goes on to observe that this, along with the broader pattern, “undercut many representations made by Defendants during this litigation” and reflects, “at the very least, a disconnect between the agency clients and counsel, which leads to some concern regarding the completeness of the administrative record.”
“Some concern.” That’s judicial restraint doing a lot of heavy lifting.
The case is now before the DC Circuit, where the government is appealing Judge Kollar-Kotelly’s earlier order blocking the data-sharing arrangement. In the meantime, DHS has been defending the program as essential to immigration enforcement, with a spokesperson offering the standard line to the Washington Post about how “information sharing across agencies is essential to identify who is in our country, including violent criminals.” Which might be more compelling if the agency’s actual implementation hadn’t involved waving through requests with “NA NA” where the address was supposed to go.
A judge has now formally documented that the IRS broke federal taxpayer confidentiality law tens of thousands of times in a single data dump, using a verification process so hollow that literal gibberish would have passed muster — and when the government discovered this, its first move was to expand access to the illegally obtained data and wait three weeks before telling the court. And yet the government is still fighting to keep the underlying program alive.
Days into President Donald Trump’s second term in the White House, a cryptocurrency billionaire posted a video on X to his hundreds of thousands of followers. “Please Donald Trump, I need your help,” he said, wearing a flag pin askew and seated awkwardly in an armchair. “I am an American. … Help me come home.”
The speaker, 46-year-old Roger Ver, was in fact no longer a U.S. citizen. Nicknamed “Bitcoin Jesus” for his early evangelism for digital currency, Ver had renounced his citizenship more than a decade earlier. At the time of his video, Ver was under criminal indictment for millions in tax evasion and living on the Spanish island of Mallorca. His top-flight legal defense team had failed around half a dozen times to persuade the Justice Department to back down. The U.S., considering him a fugitive, was seeking his extradition from Spain, and he was likely looking at prison.
Once, prosecutors hoped to make Ver a marquee example amid concerns about widespread cryptocurrency tax evasion. They had spent eight painstaking years working the case. Just nine months after his direct-to-camera appeal, however, Ver and Trump’s new Justice Department leadership cut a remarkable deal to end his prosecution. Ver wouldn’t have to plead guilty or spend a day in prison. Instead, the government accepted a payout of $49.9 million — roughly the size of the tax bill prosecutors said he dodged in the first place — and allowed him to walk away.
Ver was able to pull off this coup by taking advantage of a new dynamic inside of Trump’s Department of Justice. A cottage industry of lawyers, lobbyists and consultants with close ties to Trump has sprung up to help people and companies seek leniency, often by arguing they had been victims of political persecution by the Biden administration. In his first year, Trump issued pardons or clemency to dozens of people who were convicted of various forms of white-collar crime, including major donors and political allies. Investigations have been halted. Cases have been dropped.
Within the Justice Department, a select club of Trump’s former personal attorneys have easy access to the top appointees, some of whom also previously represented Trump. It has become a dark joke among career prosecutors to refer to these lawyers as the “Friends of Trump.”
The Ver episode, reported in detail here for the first time, reveals the extent to which white-collar criminal enforcement has eroded under the Trump administration. The account is based on interviews with current and former Justice Department officials, case records and conversations with people familiar with his case.
The Trump administration has particularly upended the way tax law violators are handled. Late last year, the administration essentially dissolved the team dedicated to criminal tax enforcement, dividing responsibility among a number of other offices and divisions. Tax prosecutions fell by more than a quarter, and more than a third of the 80 experienced prosecutors working on criminal tax cases have quit.
But even amid this turmoil, Ver’s case stands out. After Ver added several of these new power brokers to his team — most importantly, former Trump attorney Chris Kise — Trump appointees commandeered the case from career prosecutors. One newly installed Justice Department leader who had previously represented Trump’s family questioned his new subordinates on whether tax evasion should be a criminal offense. Ver’s team wielded unusual control over the final deal, down to dictating that the agreement would not include the word “fraud.”
It remains the only tax prosecution the administration has killed outright.
Ver did not reply to an extensive list of questions from ProPublica. In court filings and dealings with the Justice Department, Ver had always denied dodging his tax bill intentionally — a key distinction between a criminal and civil tax violation — and claimed to have relied on the advice of accountants and tax attorneys.
“Roger Ver took full responsibility for his gross financial misconduct to the tune of $50 million because this Department of Justice did not shy away from exposing those who cheat the system. The notion that any defendant can buy their way out of accountability under this administration is not founded in reality,” said Natalie Baldassarre, a Justice Department spokesperson.
In response to a list of detailed questions, the White House referred ProPublica to the Justice Department.“I know of no cases like this,” said Scott Schumacher, a former tax prosecutor and the director of the graduate program in taxation at the University of Washington. It is nearly unheard of for the department to abandon an indicted criminal case years in the making. “They’re basically saying you can buy your way out of a tax evasion prosecution.”
Roger Ver is not a longtime ally of Trump’s or a MAGA loyalist. He renounced his U.S. citizenship in 2014, a day he once called “the happiest day of my entire life.” In the early days of bitcoin, he controlled about 1% of the world’s supply.
Ver is clean-cut and fit — he has a black belt in Brazilian jujitsu. In his early 20s, while he was a libertarian activist in California, Ver was sentenced to 10 months in prison for illegally selling explosives on eBay. He’s often characterized that first brush with the law as political persecution by the state. After his release, he left the U.S. for Japan.
Ver became a fixture in the 2010s on the budding cryptocurrency conference circuit, where he got a kick out of needling government authority and arguing that crypto was the building block of a libertarian utopia. At a 2017 blockchain conference in Aspen, Colorado, Ver announced he had raised $100 million and was seeking a location to create a new “non-country” without any central government. For years, Ver has recommended other wealthy people consider citizenship in the small Caribbean nation of Saint Kitts and Nevis, which has no individual income tax.
“Bitcoin completely undermines the power of every single government on the entire planet to control the money supply, to tax people’s income to control them in any way,” he told a gathering of anarcho-capitalists in Acapulco, Mexico, in 2016. “It makes it so incredibly easy for people to hide their income or evade taxes.” More than one friend, he said with a smirk, had asked him how to do so: They “say, ‘Roger, I need your help. How do I use bitcoins to avoid paying taxes on it?’”
Renouncing U.S. citizenship isn’t a magic get-out-of-tax-free technique. Since 2008, the U.S. has required expatriates with assets above $2 million pay a steep “exit tax” on the appreciation of all their property.
In 2024, the Justice Department indicted Ver in one of the largest-ever cryptocurrency tax fraud cases. The government accused Ver of lying to the IRS twice. After Ver renounced his citizenship in 2014, he claimed to the IRS that he personally did not own any bitcoin. He would later admit in his deal with the government to owning at least 130,664 bitcoin worth approximately $73.7 million at the time. Then in 2017, the government alleged, Ver tried to conceal the transfer of roughly $240 million in bitcoin from U.S. companies to his personal accounts. In all, the government said he had evaded nearly $50 million in taxes.
Ver’s defense was that his failure to pay taxes arose from a lack of clarity as to how tax law treated emerging cryptocurrency, good-faith accounting errors and reliance on his advisors’ advice. He claimed it was difficult to distinguish between his personal assets and his companies’ holdings and pinpoint what the bitcoin was actually worth.
The Biden administration’s Justice Department dismissed this legal argument. Prosecutors had troves of emails that they said showed Ver misleading his own attorneys and tax preparers about the extent of his bitcoin holdings. (Ver’s team accused the government of taking his statements out of context.) The asset tracing in the case was “rock solid,” according to a person familiar with the investigation who spoke on the condition of anonymity for fear of retaliation. A jury, prosecutors maintained, was unlikely to buy Ver’s defense that he made a good-faith error.
By the time of Trump’s election, Ver had been arrested in Spain and was fighting extradition. He was also the new owner of a sleek $70 million yacht that some law enforcement officials worried he might use to escape on the high seas.
In Trump, Ver saw a possible way out. After the 2024 election, he was “barking up every tree,” said his friend Brock Pierce, a fellow ultrawealthy crypto investor who tried to gin up sympathy for Ver in Trump’s orbit.
Ver had initially gone the orthodox route of hiring tax attorneys from a prestigious law firm, Steptoe. Like many wealthy people in legal jeopardy, Ver now also launched a media blitz seeking a pardon from the incoming president. “If anybody knows what it’s like to be the victim of lawfare it’s Trump, so I think he’ll be able to see it in this case as well,” Ver said in a December 2024 appearance on Tucker Carlson’s show. On Charlie Kirk’s show, Ver appeared with tape over his mouth with the word “censored” written in red ink. Laura Loomer, the Trump-friendly influencer, began posting that Ver’s prosecution was unfair. Ver paid Trump insider Roger Stone $600,000 to lobby Congress for an end to the tax provision he was accused of violating.
Ver’s pardon campaign fizzled. His public pressure campaign — in which he kept comparing himself to Trump — was not landing, according to Pierce. “You aren’t doing yourself any favors — shut up,” his friend recalled saying.
One objection in the White House, according to a person who works on pardons, may have been Ver’s flamboyant rejection of his American citizenship. Less than a week after Trump was inaugurated, Elon Musk weighed in, posting on X, “Roger Ver gave up his US citizenship. No pardon for Ver. Membership has its privileges.”
But inside the Justice Department, Ver found an opening. The skeleton key proved to be one of the “Friends of Trump,” a seasoned defense lawyer named Christopher Kise. Kise is a longtime Florida Republican power player who served as the state’s solicitor general and has argued before the U.S. Supreme Court. He earned a place in Trump’s inner circle as one of the first experienced criminal defenders willing to represent the president after his 2020 election loss. Kise defended Trump in the Justice Department investigation stemming from the Jan. 6, 2021, attack on the U.S. Capitol and against charges that Trump mishandled classified documents when leaving the White House.
Kise had worked shoulder-to-shoulder on Trump’s cases with two lawyers who were now leaders in the Trump 2.0 Justice Department: Todd Blanche, who runs day-to-day operations at the department as deputy attorney general, and his associate deputy attorney general, Ketan Bhirud, who oversaw the criminal tax division prosecuting Ver. Kise reportedly helped select Blanche to join Trump’s legal team in the documents case, and he and Bhirud had both worked for Trump’s family as they fought civil fraud charges brought by New York Attorney General Letitia James in 2022.
On Ver’s legal team, Kise worked the phones, pressing his old colleagues to rethink their prosecution against Ver.
Kise scored the legal team’s first big victory in years: a meeting with Bhirud that cut out the career attorneys most familiar with the merits of the case.
In that meeting, however, it wasn’t clear that the new Justice Department leadership would be willing to interfere with the trajectory of Ver’s case. While the Trump administration had backed off aggressive enforcement of white-collar crimes writ large, the administration said it was still pursuing most criminal cases that had already been charged.
Bhirudinitiallyexpressed skepticism that Ver accidentally underpaid his taxes. It was “hard to believe” that a man going by “Bitcoin Jesus” would have no idea how much bitcoin he owned, Bhirud said, according to a person familiar with the case.
Bhirud and Blanche did not respond to detailed questions from ProPublica.
The Justice Department stuck to its position that either Ver would plead guilty to a crime, or the case would go to trial.
But Kise would not stop lobbying his former colleagues to reconsider. Blanche and Bhirud had already demanded that career officials justify the case again and again. Over the course of the summer, Kise wore down the Trump appointees’ zeal for pursuing Ver on criminal charges.
Kise and the law firm of Steptoe did not respond to questions.
“While there were meetings and conversations with DOJ, that is not uncommon. The line attorneys remained engaged throughout the process, and the case was ultimately resolved based on the strength of the evidence,” said Bryan Skarlatos, one of Ver’s tax attorneys and a partner at Kostelanetz.
It was a chaotic moment at the Justice Department, an institution that Trump had incessantly accused of being “weaponized” against him and his supporters. After Trump took office, the department was flooded with requests to reconsider prosecutions, with defendants claiming the Biden administration had singled them out for political persecution, too.
While many cases failed to grab the administration’s attention, Kise got results. Last week, Kise’s client Julio Herrera Velutini, a Venezuelan-Italian billionaire accused of trying to bribe the former governor of Puerto Rico, received a pardon from Trump.
“Every defense attorney is running the ‘weaponization’ play. This guy gets an audience because of who he is, because his name is Chris Kise,” said a person who recently attended a high-level meeting Kise secured to talk the Justice Department down from prosecuting a client.
As Kise stepped up the pressure, Ver’s case ate up a significant share of Bhirud’s time, despite his job overseeing more than 1,000 Justice Department attorneys, according to people familiar with the matter. Ordinarily, it would be rare for a political appointee to be so involved, especially to the exclusion of career prosecutors who could weigh in on the merits.
Bhirud began to muse to coworkers about whether failure to pay one’s taxes should really be considered a crime. Wasn’t it more of a civil matter? It seemed to a colleague that Bhirud was aware Ver’s advocates could try to elevate the case to the White House.
The government ceded ground and offered to take prison time off the table. Eventually, Ver’s team and Bhirud hit on the deal that would baffle criminal tax experts. They agreed on a deferred prosecution agreement that would allow Ver to avoid criminal charges and prison in exchange for a payout and an agreement not to violate any more laws. The government usually reserves such an agreement for lawbreaking corporations to avoid putting large employers out of business — not for fugitive billionaires.
By the time fall approached, Kise and Bhirud, with Blanche’s blessing, were negotiating Ver’s extraordinary deal line by line. Once more, career prosecutors were cut out from the negotiations.
Ver’s team enjoyed a remarkable ability to dictate terms. They rejected the text of the government’s supposed final offer because it required him to admit to “fraud,” according to a person familiar with the negotiations. In the end, Ver agreed to admit only to a “willful” failure to report and pay taxes on all his bitcoin and turned over the $50 million.
The government arrived at that figure in a roundabout manner. It dropped its claim that Ver had lied on his 2017 tax return. The $50 million figure was based on how much he had evaded in taxes in 2014 alone, plus what the government asserted were interest and penalties. In the end, the deal amounted to the sum he allegedly owed in the first place. He never even had to leave Mallorca to appear in a U.S. court.
Under any previous administration, convincing the leadership of the tax division to drop an indicted criminal case and accept a monetary penalty instead would be a nonstarter. While the Justice Department settles most tax matters civilly through fines, when prosecutors do charge criminal fraud, their conviction rate is over 90%.
People “always ask you, ‘Can’t I just pay the taxes and it’ll go away?’” said Jack Townsend, a former DOJ tax attorney. “The common answer that everybody gave — until the Trump administration — was that, no, you can’t do that.”
When the Justice Department announced the resolution in October, it touted it as a victory.
“We are pleased that Mr. Ver has taken responsibility for his past misconduct and satisfied his obligations to the American public,” Bhirud said in the Justice Department’s press release announcing the deferred prosecution agreement. “This resolution sends a clear message: whether you deal in dollars or digital assets, you must file accurate tax returns and pay what you owe.”
Inside the Justice Department, the resolution was demoralizing: “He’s admitted he owes money, and we get money, but everything else about it stinks to high heaven,” said a current DOJ official familiar with the case. “We shouldn’t negotiate with people who are fugitives, as if they have power over us.”
Among the wealthy targets of white-collar criminal investigations, the Ver affair sent a different message. Lawyers who specialize in that kind of work told ProPublica that more and more clients are asking which of the “Friends of Trump” they should hire. One prominent criminal tax defense lawyer said he would give his clients a copy of Ver’s agreement and tell them, “These are the guys who got this done.”
The only one of Ver’s many lawyers to sign it was Christopher Kise.
The lawsuit, filed this week in federal court in Miami, claims that Trump, his sons, and the Trump Organization were grievously harmed when IRS contractor Charles Littlejohn leaked Trump’s tax returns to the New York Times and ProPublica back in 2019 and 2020. Littlejohn was caught, prosecuted, and is currently serving a five-year prison sentence—the system worked, justice was served, case closed. But apparently that’s not enough for a man whose appetite for grift has no discernible ceiling.
Before we dive into why this lawsuit is weapons-grade insane, let’s establish some context that the complaint conveniently glosses over.
When Trump first ran for president in 2016, he broke with decades of tradition by refusing to release his tax returns. Every major party nominee since Nixon had done so voluntarily. Trump’s excuse? He was being audited and would release them after the audit was complete. Somehow, nearly a decade later, those returns were never officially released. There’s no clear evidence the audit ever existed. The whole thing had the distinct aroma of a man who had something to hide.
In 2020, the New York Times obtained 17 years of Trump’s tax records from Littlejohn. The reporting revealed that Trump paid just $750 in federal income taxes in both 2016 and 2017, and paid no income taxes at all in 10 of the previous 15 years—largely by reporting chronic business losses. The House Ways & Means Committee later obtained and released some of his returns through proper legal channels.
And the result of all this exposure? Trump won the 2024 election and his net worth has skyrocketed in such an obvious way that, contra Karoline Leavitt’s statement, it would be difficult to find anyone who legitimately believes that Trump isn’t profiting off his Presidency.
According to Forbes, Trump’s wealth jumped from $3.9 billion in 2024 to $7.3 billion by September 2025, driven largely by his crypto ventures and the value of Trump Media and Technology Group. So grievous was the harm from this leak that Trump is now richer than he’s ever been.
Which brings us to the lawsuit. Trump is demanding $10 billion—more than his entire current net worth—from the federal government. The federal government he controls and which he’s stocked with cronies.
I need to repeat that. Donald Trump is trying to more than double his personal wealth by simply demanding that the IRS, which he controls, give him $10 billion in taxpayer funds. This goes beyond corruption. You need a different word for this altogether.
Let’s break down the multiple levels on which this is absolutely batshit:
The President is suing his own government. Think about this for a moment. Trump controls the executive branch. The IRS is part of the Treasury Department. The Department of Justice—which would normally defend the government in such lawsuits—is currently headed by an Attorney General and Deputy Attorney General who previously worked as Trump’s personal lawyers and who have repeatedly made it clear that they view their current jobs as still being the President’s personal lawyers. The idea that Trump can file a lawsuit against agencies he controls, staffed with loyalists who seem to believe they work for him personally rather than the American people, is so blatantly corrupt that it puts pretty much all past corruption to shame.
As I wrote last year when Trump demanded a mere $230 million in a similar scheme, this creates a situation where Trump’s own lawyers get to decide whether Trump’s claims should be successful—and potentially how much taxpayer money flows directly into his pocket. The fact that it’s now more than 40 times that amount just demonstrates that his corruption has no upper bound.
The damages claimed are laughable. The complaint lists the horrifying “harm” Trump suffered. Hold onto your hats:
ProPublica published at least 50 articles as a result of Defendants’ unlawful disclosures, many of which contained false and inflammatory claims about Defendants’ confidential tax documents.
And:
Because of Defendants’ wrongful conduct, Plaintiffs were subject to, among many others, at least eight (“8”) separate stories in the New York Times which wrongly and specifically alleged various improprieties related to Plaintiffs’ financial records and taxpayer history
Eight. Stories. In the New York Times. That’s apparently worth $10 billion in damages. From the US taxpayer. Trump has probably generated more negative headlines in a single weekend of Truth Social posts.
And if the stories were really defamatory (note: they weren’t) sue those publications for defamation and… see how that goes. Because Trump’s defamation lawsuits have a remarkable track record of gettinglaughedoutof court.
But here—clever, clever, clever—this case need never go to court. The IRS and the DOJ (both run by Trump loyalists) can just “settle” and hand over however much taxpayer money Trump wants.
The complaint undermines itself. In a truly galaxy-brained move, Trump’s lawyers included this gem from Littlejohn’s deposition:
When asked, “so you were looking to do something to cause some kind of harm to him?” Mr. Littlejohn responded, “Less about harm, more just about a statement. I mean, there’s little harm that can actually be done to him, I think. . . He’s shown a remarkable resilience.”
They put this in their own complaint. The guy who leaked the documents, when asked under oath whether he intended to cause harm, essentially said “nah, you can’t really hurt that guy.” And Trump’s lawyers thought this helped their case.
Or… they knew that it doesn’t matter how bad the complaint actually is because Trump is effectively playing both sides, and that means the side the benefits Trump personally (at the expense of the American taxpayer) is almost certain to win out.
Isn’t it great the Roberts Supreme Court said there’s nothing the courts can do to stop this?
The legal theory is absurd. The complaint argues that the IRS should have known Littlejohn would leak documents because… the Treasury Inspector General had warned about “security deficiencies” in the IRS’s data protection systems. By this logic, any time any government system has any vulnerability, taxpayers should be on the hook for billions if that vulnerability is ever exploited. It’s malpractice dressed up in legal formatting.
The complaint also leans heavily on politicized language that has no place in a legal filing:
From May 2019 through at least September 2020, former IRS employee Charles “Chaz” Littlejohn, who was jointly employed by the IRS and/or one of its contractors, illegally obtained access to, and disclosed Plaintiffs’ tax returns and return information to the New York Times, ProPublica, and other leftist media outlets.
“Leftist media outlets.” In a legal complaint. Filed by a sitting president. Against his own government. Demanding $10 billion. This is a political document, rather than a serious legal complaint. Because, again, the legal stance here makes no difference. There is no adversarial process. Only Trump’s insatiable desire to take people’s money.
This is especially rich given everything else happening. This lawsuit lands at a time when Trump’s administration is gutting the IRS’s enforcement capabilities, when the DOJ has been transformed into Trump’s personal law firm, and when the government is lurching from shutdown to shutdown. But sure, let’s cut Donald Trump a check for ten billion dollars because reporters wrote stories about his taxes—taxes he refused to release voluntarily despite decades of precedent (and which also, once leaked, didn’t appear to do him the slightest bit of political damage).
For all the talk about cutting “waste, fraud, and abuse,” the president himself is attempting to walk off with enough taxpayer money to fund the entire National Endowment for the Arts for the next 60 years.
And the most galling part? Every other presidential candidate in modern history released their tax returns willingly. Trump’s entire complaint rests on the premise that he was harmed by the public learning information that every other candidate simply… disclosed. The audacity of claiming $10 billion in damages for being forced into a transparency that was voluntary for everyone else is genuinely breathtaking.
Littlejohn broke the law. He knew it, he did it anyway, and he’s paying for it with five years of his life. Some have argued he was a whistleblower serving the public interest; others say a law is a law. But none of that matters here, because what Trump is doing has nothing to do with justice or compensation for actual harm.
This is a sitting president attempting to use the legal system to transfer $10 billion from the U.S. Treasury—which belongs to the American people—into his personal bank account. The case will be litigated by a Justice Department stuffed with his former personal attorneys. The damages he claims are fantastical. The harm he allegedly suffered resulted in him getting richer than ever and winning re-election.
So yes, Karoline, you’re right: this is absurd. Just not in the way you meant.
We knew this was coming, but it doesn’t make it any less stupid. The road to the IRS’ Direct File program was long and hard-fought. We here at Techdirt have been talking about, and advocating for, something like the Direct File program for at least 15 years. The concept behind the program is a simple one. For a class of citizens with very simple income and tax payments, the IRS already has all the information it needs to process a tax return. In those cases, the IRS can simply mail the information it has to a taxpayer, ask them to sign off verifying the information is complete and accurate, and then process the return. The problem with this is that it cuts out the tax-prep industry that absolutely adores preying on these very same people to milk them for tax-prep services they don’t actually need.
For decades, the industry did exactly that. Even as the government partnered with private tax preparation companies like Intuit to provide federally backed “free” tax-prep websites and platforms, those same companies did everything they could to hide those free services and, in lieu of that, try to sell add-on services to those who were supposed to be able to file for free. While this eventually led to massive FTC fines for Intuit, this was the Faustian bargain that came from years and years of lobbying: The government would work with private industry for free filing programs in exchange for those same companies getting the government to line vulnerable citizens up like cattle headed to slaughter.
The IRS’ Direct File program came directly in the aftermath of the shady shit companies like Intuit did. It piloted in 2023, was a resounding success, and went live in 12 states in 2024. In April of this year, reports of Trump’s plans to end the program filtered into the news, even as the reviews by users of Direct File were overwhelmingly positive. Then, in August, IRS Commissioner Billy Long, himself a tax-prep industry player, said the program would be gone.
And, if you were holding onto any hope that this administration would keep a program in place that citizens love and ultimately reduces the overhead on the IRS, consider your hopes dashed. The IRS has begun notifying the states that had Direct File programs that the program will not be available for 2026 tax filings.
In an email sent from the IRS to 25 states, the tax agency thanked them for collaborating and noted that “no launch date has been set for the future.”
“IRS Direct File will not be available in Filing Season 2026,” says the Monday email, obtained by Nextgov/FCW and confirmed by multiple sources. It follows reports that the program was ending and Trump’s former tax chief, Billy Long, remarking over the summer that the service was “gone.”
Instead, that whole big beautiful bill we have heard so much about contained directions for the IRS to once again partner with private industry in a Free File program. The exact situation we were in that led to so much outrage at the behavior of those private companies, which in turn led to the creation of Direct File to begin with. This is simply winding the clock backwards to something people hated and calling it “progress.”
“It’s not surprising since the Trump administration sabotaged Direct File all through this year’s filing season, at the urging of tax prep monopolies like TurboTax,” Adam Ruben, the vice president of the Economic Security Project, told Nextgov/FCW. “Trump’s billionaire friends get favors while honest hardworking Americans will pay more to file their taxes.”
This isn’t something that can even be argued, honestly. It’s exactly what is happening. And, frankly, actions like this put the lie to Donald Trump’s claim to be fighting for the “little guy”. It’s all a bullshit grift, you see, with middlemen who are as wealthy as they are needlessly having Americans queued up to be conned.
This was a good program. The people who used it liked it. No serious negative consequence was experienced in its use.
And Trump did away with it so that mega-corporations like Intuit can continue skimming money from citizens in order to tell the IRS what it already knows.
I actually wrote this article yesterday before the government shutdown happened so I don’t really discuss that, but it sounds like we may end up going through all this again if the Trump regime goes through with its plans to use the shutdown to fire a bunch more people who are important, but who no one in charge is smart enough to understand what they do.
Remember when Elon Musk and his merry band of DOGE vandals were going to revolutionize government by firing everyone and slashing everything? Yeah, about that. Turns out when you fire people who actually know how to do essential jobs, you eventually need to… hire them back. Who could have predicted this shocking turn of events? (Spoiler: literally everyone who was paying attention.)
The General Services Administration is now desperately begging hundreds of federal employees to come back after Musk’s cost-cutting blitz left the agency “broken and understaffed.” These are the same workers who were supposedly dead weight that needed to be eliminated to save taxpayer money. Funny how that worked out.
The General Services Administration has given the employees — who managed government workspaces — until the end of the week to accept or decline reinstatement, according to an internal memo obtained by The Associated Press.
Those who accept must report for duty on October 6 after what amounts to a seven-month paid vacation, during which time the GSA in some cases racked up high costs — passed along to taxpayers — to stay in dozens of properties whose leases it had slated for termination or were allowed to expire.
A seven-month paid vacation. Let’s pause to appreciate the stunning “efficiency” here. These workers got fired, kept getting paid, and now the government is begging them to come back because—surprise!—they actually knew what they were doing, were needed, and when they were suddenly cut loose it turned out to be an expensive mess that made it harder for the government to function. Meanwhile, taxpayers footed the bill for both their salaries and the mounting costs of properties that couldn’t be properly managed without them.
Of course, this was pretty much what a ton of actual experts warned would happen.
This is exactly what happens when a bunch of overconfident, under-informed Silicon Valley bros assume that complex government operations are just inefficient startups waiting to be “disrupted.” GSA wasn’t some bloated tech company with redundant product managers—it’s the agency that manages thousands of federal work spaces. You know, actual critical infrastructure that keeps the government functioning.
And, of course, GSA actually had a strong and incredibly effective team that worked on efficiency… and Musk fired them all.
“Ultimately, the outcome was the agency was left broken and understaffed,” said Chad Becker, a former GSA real estate official. “They didn’t have the people they needed to carry out basic functions.”
Becker, who represents owners with government leases at Arco Real Estate Solutions, said GSA has been in a “triage mode” for months. He said the sudden reversal of the downsizing reflects how Musk and his Department of Government Efficiency had gone too far, too fast.
“Too far, too fast” is a charitable way to describe what amounts to institutional vandalism. This wasn’t thoughtful government reform—it was pure destruction for the sake of destroying anything a bunch of ignorant, incurious idiots didn’t understand, on the assumption that if they didn’t understand it, it couldn’t be that important.
They were wrong, and now taxpayers are left footing the bill.
Also, we’re not just talking about GSA here. There’s a pattern here of institutional destruction masquerading as reform. The rehiring wave is spreading across multiple agencies as the reality of Musk’s “efficiency” vision crashes into the actual requirements of running a government:
Last month, the IRS said it would allow some employees who took a resignation offer to remain on the job. The Labor Department has also brought back some employees who took buyouts, while the National Park Service earlier reinstated a number of purged employees.
The scale of this backtracking is breathtaking. When you’re rehiring at the IRS, Labor Department, National Park Service, and GSA simultaneously, that’s not fine-tuning—that’s admitting your entire approach was fundamentally broken.
In the end, the massive job cuts that were supposed to save money have, instead, created expensive messes that cost way more than the original “inefficiencies” they were meant to fix:
The administration slashed GSA’s headquarters staff by 79%, its portfolio managers by 65% and facilities managers by 35%, according to a federal official briefed on the situation. The official, who was not authorized to speak to the media, provided the statistics on condition of anonymity.
As a result of the internal turmoil,131 leases expired without the government actually vacating the properties, the official said. The situation has exposed the agencies tosteep fees because property owners have not been able to rent outthose spaces to other tenants.
This is what happens when you mistake activity for achievement. DOGE fired nearly everyone who managed the government’s portfolio of real estate and then acted shocked when nobody was left to manage the portfolios. Now taxpayers are on the hook for “steep fees” because properties couldn’t be properly vacated. The government is paying rent on spaces it’s not using because the people who knew how to handle lease transitions were… fired to save money.
And now they’re desperately trying to hire them back so they won’t even save money on the decrease in salaries.
Even DOGE’s own metrics show how spectacularly this has backfired:
DOGE’s “Wall of Receipts,” which once boasted that the lease cancellations alone would save nearly $460 million, has since reduced that estimate to $140 million by the end of July, according to Becker, the former GSA real estate official.
From $460 million in supposed savings down to $140 million in actual savings—a 70% reduction in their own projections. This collapse in projected savings reveals the fundamental flaw in DOGE’s approach: they counted theoretical benefits from lease cancellations without accounting for the institutional knowledge required to execute those cancellations. The real number, factoring in transition costs, legal fees, and operational disruptions, is almost certainly negative. And that’s assuming you trust DOGE’s remaining figures. Which you probably shouldn’t.
This entire debacle perfectly illustrates the fundamental flaw in the “government is just a broken business” mentality. Government agencies exist to serve public functions that often don’t map neatly onto Silicon Valley efficiency models. When you fire the people who understand complex lease agreements, regulatory compliance, and interagency coordination, you don’t get innovation—you get extremely expensive chaos.
The particularly galling part is that these workers will now return to clean up the mess created by their own firing. They’ll spend months untangling lease complications, rebuilding institutional knowledge, and reestablishing relationships with contractors and other agencies. All of this remedial work will cost far more than their original salaries ever did.
The Government Accountability Office is now investigating this mess, which means taxpayers will also foot the bill for studying how badly DOGE screwed up:
The Government Accountability Office, an independent congressional watchdog, is examining the GSA’s management of its workforce, lease terminations and planned building disposals and expects to issue findings in the coming months, said David Marroni, a senior GAO official.
So we’re paying to study the costs of the effort that led to the cuts that didn’t save money but instead cost more money. It’s inefficiency all the way down.
This is what happens when you let tech bros cosplay as government reformers with no oversight or expertise. They mistake complexity for inefficiency, assume institutional knowledge is just bureaucratic dead weight, and believe that “disruption” is always improvement. The result is predictable: expensive chaos that requires the very expertise they dismissed to fix.
The federal employees now being begged to return have every right to negotiate better terms, demand back pay for the chaos they didn’t create, and insist on job security protections against future DOGE-style tantrums. They’re the ones who will clean up this mess, rebuild what was broken, and restore the basic functions that kept government working before Musk decided to reinvent the wheel as a square.
Rather than government efficiency we ended up with expensive performance art designed to satisfy the digitally-inspired fantasies of people who think running a government is like optimizing a social media algorithm. The only thing DOGE has efficiently accomplished is proving that some people’s expertise actually matters, even if—especially if—Silicon Valley billionaires don’t understand what that expertise does.
I am reminded of Rod Hilton’s viral Mastodon post from a few years back about Elon Musk:
If you can’t see that, it says:
He talked about electric cars. I don’t know anything about cars, so when people said he was a genius I figured he must be a genius.
Then he talked about rockets. I don’t know anything about rockets, so when people said he was a genius I figured he must be a genius.
Now he talks about software. I happen to know a lot about software & Elon Musk is saying the stupidest shit I’ve ever heard anyone say, so when people say he’s a genius I figure I should stay the hell away from his cars and rockets.
I get the feeling that a lot of government workers who previously thought he was a genius may also now choose to stay away from Musk’s cars and rockets. As they should.
For no less than 25 years now, Techdirt has been writing about how the tax preparation industry, especially Intuit, has spent gobs of money bribing lobbying government to keep relatively low-earners from simple methods for filing their tax returns. The series of posts you can find in that link, particularly those in the last 5-10 years, will give you an idea of just how shady and shitty these companies have been to the public.
The short version goes something like this: the IRS partnered with large private tax prep companies to provide free online tax prep software for people making less than a certain dollar amount in exchange for the government not creating its own system for doing so. That’s it. The IRS didn’t pay these companies for their services. They just promised not to compete with them.
Now, why would these companies enter into such an arrangement? Is it because they wanted to help out lower income folks by offering free services? No, silly rabbit, they wanted to trick the public into paying for what they agreed to provide for free! And that’s exactly what companies like Intuit did, notoriously hiding its free services in every way it could and pushing qualified free-to-file applicants instead into paid tax prep services. The end result was fines from the FTC, Intuit attempting to hide refunds for the services it tricked the public into buying, and the discovery that it was tricking American veterans in the same manner, all the tune of $1 billion in income for Intuit alone.
Partially as a result of all of that above bullshit trickery, the government altered its deal with the tax prep industry and began offering its own Direct File program. For simple filers, the IRS piloted Direct File in 12 states in 2024, prepopulating a return for those that enroll, all based on information that the IRS already has, and asking participants to review it and either agree or dispute the information. Most overwhelmingly agree and the program was reviewed as “excellent or above average” by north of 90% of participants, which is of course why Trump and Elon Musk, back when they were besties, decided to fold the part of the government working on the program.
President Donald Trump’s massive spending and policy bill includes funding to research and “replace any direct e-file programs run by the Internal Revenue Service.” Already, the program is “gone,” Long said at a tax professional summit on July 28, Bloomberg Law reports.
“You’ve heard of Direct File, that’s gone,” Long said. “Big beautiful Billy wiped that out. I don’t care about Direct File. I care about direct audit.”
“Commissioner Billy Long is committed to modernizing the IRS and providing a taxpayer experience that meets today’s expectations, which includes giving taxpayers transparency into the status of their tax returns and audits,” an IRS spokesperson told CNBC Make It in an emailed statement.
That modernization effort reportedly is to rewind the clock several years and put us right back to where we were: a partnership between the IRS and the tax prep industry to offer free file programs. Modernization apparently means doing the thing we used to do that didn’t work.
The IRS has another free filing program where the agency partners with third-party tax preparation software companies to provide services to taxpayers, although there are varying eligibility requirements, including adjusted gross income and state of residence. You can use the IRS’ questionnaire tool to find an applicable partner.
There is literally no reason for any of this. Complaints from the GOP about how the program costs too much are obviously silly. The IRS has this information and the program should largely reduce the need for IRS audits and the like, since filers using it are using the IRS’ information. Complaints about conflicts of interest are also dumb, as the IRS is already the enforcer of taxation and participants have the option to dispute the information the IRS has. None of this makes sense…
…until you view it as a gift to the tax industry that has been lobbying against this program for decades before its creation. That’s all this is, a gift to the companies that lobbied for a favor.
And while Intuit exited the Free File program years ago, I’d be willing to bet my next tax return that they jump right back in now that they know the grift is back on.
The Internal Revenue Service is building a computer program that would give deportation officers unprecedented access to confidential tax data.
ProPublica has obtained a blueprint of the system, which would create an “on demand” process allowing Immigration and Customs Enforcement to obtain the home addresses of people it’s seeking to deport.
Last month, in a previously undisclosed dispute, the acting general counsel at the IRS, Andrew De Mello, refused to turn over the addresses of 7.3 million taxpayers sought by ICE. In an email obtained by ProPublica, De Mello said he had identified multiple legal “deficiencies” in the agency’s request.
Two days later, on June 27, De Mello was forced out of his job, people familiar with the dispute said. The addresses have not yet been released to ICE. De Mello did not respond to requests for comment, and the administration did not address questions sent by ProPublica about his departure.
The Department of Government Efficiency began pushing the IRS to provide taxpayer data to immigration agents soon after President Donald Trump took office. The tax agency’s acting general counsel refused and was replaced by De Mello, who Trump administration officials viewed as more willing to carry out the president’s agenda. Soon after, the Department of Homeland Security, ICE’s parent agency, and the IRS negotiated a “memorandum of understanding” that included specific legal guardrails to safeguard taxpayers’ private information.
In his email, De Mello said ICE’s request for millions of records did not meet those requirements, which include having a written assurance that each taxpayer whose address is being sought was under active criminal investigation.
“There’s just no way ICE has 7 million real criminal investigations, that’s a fantasy,” said a former senior IRS official who had been advising the agency on this issue. The demands from the DHS were “unprecedented,” the official added, saying the agency was pressing the IRS to do what amounted to “a big data dump.”
In the past, when law enforcement sought IRS data to support its investigations, agencies would give the IRS the full legal name of the target, an address on file and an explanation of why the information was relevant to a criminal inquiry. Such requests rarely involved more than a dozen people at a time, former IRS officials said.
Danny Werfel, IRS commissioner during the Biden administration, said the privacy laws allowing federal investigators to obtain taxpayer data have never “been read to open the door to the sharing of thousands, tens of thousands, or hundreds of thousands of tax records for a broad-based enforcement initiative.”
A spokesperson for the White House said the planned use of IRS data was legal and a means of fulfilling Trump’s campaign pledge to carry out mass deportations of “illegal criminal aliens.”
Taxpayer data is among the most confidential in the federal government and is protected by strict privacy laws, which have historically limited its transfer to law enforcement and other government agencies. Unauthorized disclosure of taxpayer return information is a felony that can carry a penalty of up to five years in prison.
The system that the IRS is now creating would give ICE automated access to home addresses en masse, limiting the ability of IRS officials to consider the legality of transfers. IRS insiders who reviewed a copy of the blueprint said it could result in immigration agents raiding wrong or outdated addresses.
“If this program is implemented in its current form, it’s extremely likely that incorrect addresses will be given to DHS and individuals will be wrongly targeted,” said an IRS engineer who examined the blueprints and who, like other officials, spoke on condition of anonymity for fear of retribution.
The dispute that ended in De Mello’s ouster was the culmination of months of pressure on the IRS to turn over massive amounts of data in ways that would redefine the relationship between the agency and law enforcement and reduce taxpayers’ privacy, records and interviews show.
In one meeting in late March between senior IRS and DHS officials, a top ICE official made a suggestion: Why doesn’t Homeland Security simply provide the name and state of its targets and have the IRS return the addresses of everyone who matches that criteria?
The IRS lawyers were stunned. They feared they could face criminal liability if they handed over the addresses of individuals who were not under a criminal investigation. The conversation and news of deeper collaboration with ICE so disturbed career staff that it led to a series of departures in late March and early April across the IRS’ legal, IT and privacy offices.
They were “pushing the boundaries of the law,” one official said. “Everyone at IRS felt the same way.”
The Blueprint
The technical blueprint obtained by ProPublica shows that engineers at the agency are preparing to give DHS what it wants: a system that enables massive automated data sharing. The goal is to launch the new system before the end of July, two people familiar with the matter said.
The DHS effort to obtain IRS data comes as top immigration enforcement leaders face escalating White House pressure to deport some 3,000 people per day, according to reports.
One federal agent tasked with assisting ICE on deportations said recent operations have been hamstrung by outdated addresses. Better information could dramatically speed up arrests. “Some of the leads that they were giving us were old,” said the agent, who spoke on condition of anonymity because he was not authorized to speak with the press. “They’re like from two administrations ago.”
In early March, immigrants rights groups sued the IRS hoping to block the plan, arguing that the memorandum of understanding between DHS and the IRS is illegal. But a judge in early May ruled against them, saying the broader agreement complied with Section 6103, the existing law regulating IRS data sharing. That opened the door for engineers to begin building the system.
The judge did not address the technical blueprint, which didn’t exist at the time of the ruling. But the case is pending, which means the new system could still come under legal review.
Until now, little was known about the push and pull between the two agencies or the exact technical mechanics behind the arrangement.
The plan has been shrouded in secrecy even within the IRS, with details of its development withheld from regular communications. Several IRS engineers and lawyers have avoided working on the project out of concerns about personal legal risk.
Asked about the new system, a spokesperson for IRS parent agency the Treasury Department said the memorandum of understanding, often called an MOU, “has been litigated and determined to be a lawful application of Section 6103, which provides for information sharing by the IRS in precise circumstances associated with law enforcement requests.”
At a time when Trump is making threats to deport not only undocumented immigrants but also U.S. citizens, the scope of information-sharing with the IRS could continue to grow, according to documents reviewed by ProPublica and sources familiar with the matter: DHS has been looking for ways to expand the agreement that could allow Homeland Security officials to seek IRS data on Americans being investigated for various crimes.
Last month, an ICE attorney proposed updating the MOU to authorize new data requests on people “associated with criminal activities which may include United States citizens or lawful permanent residents,” according to a document seen by ProPublica. The status of this proposal is unclear. De Mello, at the time, rejected it and called for senior Treasury Department leadership to personally sign off on such a significant change.
The White House described DHS’ work with the IRS as a good-faith effort to identify and deport those who are living in the country illegally.
“ProPublica continues to degrade their already terrible reputation by suggesting we should turn a blind eye to criminal illegal aliens present in the United States for the sake of trying to collect tax payments from them,” White House spokesperson Abigail Jackson said in a statement after receiving questions about the blueprint from ProPublica.
She pointed to the April MOU as giving the government the authority to create the new system and added, “This isn’t a surveillance system. … It’s part of President Trump’s promise to carry out the mass deportation of criminal illegal aliens — the promise that the American people elected him on and he is committed to fulfilling.”
In a separate statement, a senior DHS official also cited the court’s approval of the MOU, saying that it “outlines a process to ensure that sensitive taxpayer information is protected while allowing law enforcement to effectively pursue criminal violations.”
How the System Works
The new system would represent a sea change, allowing law enforcement to request enormous swaths of confidential data in bulk through an automated, computerized process.
The system, according to the blueprint and interviews with IRS engineers, would work like this:
First, DHS would send the IRS a spreadsheet containing the names and previous addresses of the people it’s targeting. The request would include the date of a final removal order, a relevant criminal statute ICE is using to investigate the individual, and the tax period for which information is sought. If DHS fails to include any of this information, the system would reject the request.
The system then attempts to match the information provided by the DHS to a specific taxpayer identification number, which is the primary method by which the IRS identifies an individual in its databases.
If the system makes a match, it accesses the individual’s associated tax file and pulls the address listed during the most recent tax period. Then the system would produce a new spreadsheet enriched with taxpayer data that contains DHS’ targets’ last known addresses. The spreadsheet would include a record of names rejected for lack of required information and names for which it could not make a match.
Tax and privacy experts say they worry about how such a powerful yet crude platform could make dangerous mistakes. Because the search starts with a name instead of a taxpayer identification number, it risks returning the address of an innocent person with the same name as or a similar address to that of one of ICE’s targets. The proposed system assumes the data provided by DHS is accurate and that each targeted individual is the subject of a valid criminal investigation. In effect, the IRS has no way to independently check the bases of these requests, experts told ProPublica.
In addition, the blueprint does not limit the amount of data that can be transferred or how often DHS can request it. The system could easily be expanded to acquire all the information the IRS holds on taxpayers, said technical experts and IRS engineers who reviewed the documents. By shifting a single parameter, the program could return more information than just a target’s address, said an engineer familiar with the plan, including employer and familial relationships.
Engineers based at IRS offices in Lanham, Maryland, and Dallas are developing the blueprint.
“Gone Back on Its Word”
For decades, the American government has encouraged everyone who makes an income in the U.S. to pay taxes — regardless of immigration status — with an implicit promise that their information would be protected. Now that same data may be used to locate and deport noncitizens.
“For years, the IRS has told immigrants that it only cares that they pay their taxes,” said Nandan Joshi, an attorney with the Public Citizen Litigation Group, which is seeking to block the data-sharing agreement in federal court. “By agreeing to share taxpayer data with ICE on a mass basis, the IRS has gone back on its word.”
The push to share IRS data with DHS emerged while Elon Musk’s DOGE reshaped the engineering staff of the IRS. Sam Corcos, a Silicon Valley startup founder with no government experience, pushed out more than 50 IRS engineers and restructured the agency’s engineering priorities while he was the senior DOGE official at the agency. He later became chief information officer at Treasury. He has also led a separate IRS effort to create a master database using products from Silicon Valley giant Palantir Technologies, enabling the government to link and search large swaths of data.
Corcos didn’t respond to a request for comment. The White House said DOGE is not part of the DHS-IRS pact.
Sen. Ron Wyden, the ranking Democrat on the Senate Committee on Finance, which oversees the IRS, told ProPublica the system being built was ripe for abuse. It “would allow an outside agency unprecedented access to IRS records for reasons that have nothing to do with tax administration, opening the door to endless fishing expeditions,” he said.
The Treasury Inspector General for Tax Administration, the department’s internal watchdog, is already probing efforts by Trump and DOGEto obtain private taxpayer data and other sensitive information, ProPublica reported in April.
The Trump administration continues to add government agencies to its deportation drive.
DOGE and DHS are also working to build a national citizenship database, NPR reported last month. The database links information from the Social Security Administration and the DHS, ostensibly for the purpose of allowing state and local election officials to verify U.S. citizenship.
And in May, a senior Treasury Department official directed 250 IRS criminal investigative agents to help deportation operations, a significant shift for two agencies that historically have had separate missions.
Welcome to the expanded panopticon, American citizens. Thanks to a very small percentage of your fellow Americans, the president, whom a minority of the general public returned to power, is throwing millions at a private contractor to gather as much data on US citizens as possible for reasons it has left unstated.
That private contractor would be Palantir, which has never shied away from the role of villain since its inception. And it only makes sense this administration would choose Palantir, what with the company’s founder being such a huge fan of Trump, fascism, and censorship.
Nearly a billion dollars are headed Palantir’s way, even as DOGE continues to strip funding from nearly every government agency it has decided to meddle with. That’s not a coincidence, as the New York Times reports.
Palantir’s selection as a chief vendor for the project was driven by Elon Musk’s Department of Government Efficiency, according to the government officials. At least three DOGE members formerly worked at Palantir, while two others had worked at companies funded by Peter Thiel, an investor and a founder of Palantir.
Just more insiders doing some (horse) trading. Palantir has already received more than $100 million from the Trump Administration since Trump took office in January. The Defense Department’s outlay dwarfs the $113 million already allocated towards this project. The DoD has awarded a $795 million contract to Palantir, but has yet to actually start spending that money.
It obviously will end up spending it. But the main concern is the addition of Palantir software to a bunch of agencies not normally considered to be part of the federal government’s domestic spyware programs.
The push has put a key Palantir product called Foundry into at least four federal agencies, including D.H.S. and the Health and Human Services Department. Widely adopting Foundry, which organizes and analyzes data, paves the way for Mr. Trump to easily merge information from different agencies, the government officials said.
The administration and its surveillance partner are also seeking to infect the IRS and Social Security Administration with Palantir’s tech, adding to the massive haystack the Trump administration can use for whatever purposes it wants.
Given how this administration has handled itself since returning to office, it’s not that much of a stretch to believe this massive data collection will be used to help Trump and his compatriots find targets for arrest, deportation, or unconstitutional executive orders.
Mr. Trump could potentially use such information to advance his political agenda by policing immigrants and punishing critics, Democratic lawmakers and critics have said.
That’s obviously the point of this massive data pile, which removes silos that were put there for a reason. Stripping away these separations creates an extremely enticing target for malicious hackers, who always appreciate government contractors doing the dirty work of amassing personally identifiable information for them.
The only open question is whether Palantir’s expanded data collection will be exploited by malicious hackers or malicious administration members first. Rest assured, it will be abused by someone, and any legal recourse after the fact isn’t going to be able to undo whatever harms have been inflicted on Americans by this intermingling of data from multiple federal agencies.
Palantir, of course, couldn’t care less. Its statement on this disturbing development merely says that it’s proud to be a hammer but it can’t control what the administration decides are nails.
“We act as a data processor, not a data controller,” it said. “Our software and services are used under direction from the organisations that license our products: these organisations define what can and cannot be done with their data; they control the Palantir accounts in which analysis is conducted.”
This is obviously true. A contractor can’t control what the government does with the tools it provides. However, it can decide whether or not to provide the tools. Palantir will never choose otherwise, no matter who’s in office. And if it’s willing to aid a president determined to do bad things with the data it provides, it’s certainly willing to sell to other autocrats and human rights abusers elsewhere in the world. Ethics are a luxury this multi-billion dollar company apparently can’t afford.
In an unprecedented move, the U.S. Department of Treasury and the U.S. Department of Homeland Security (DHS) recently reached an agreement allowing the IRS to share with Immigration and Customs Enforcement (ICE) taxpayer information of certain immigrants. The redacted 15-page memorandum of understanding (MOU) was exposed in a court case, Centro de Trabajadores Unidos v. Bessent, which seeks to prevent the IRS from unauthorized disclosure of taxpayer information for immigration enforcement purposes. Weaponizing government data vital to the functioning and funding of public goods and services by repurposing it for law enforcement and surveillance is an affront to a democratic society. In addition to the human rights abuses this data-sharing agreement empowers, this move threatens to erode trust in public institutions in ways that could bear consequences for decades.
Specifically, the government justifies the MOU by citing Executive Order 14161, which was issued on January 20, 2025. The Executive Order directs the heads of several agencies, including DHS, to identify and remove individuals unlawfully present in the country. Making several leaps, the MOU states that DHS has identified “numerous” individuals who are unlawfully present and have final orders of removal, and that each of these individuals is “under criminal investigation” for violation of federal law—namely, “failure to depart” the country under 8 U.S.C. § 1253(a)(1). The MOU uses this basis for the IRS disclosing to ICE taxpayer information that is otherwise confidential under the tax code.
In practice, this new data-sharing process works like this: ICE makes a request for an individual’s name and address, taxable periods for which the return information pertains, the federal criminal statute being investigated, and reasons why disclosure of this information is relevant to the criminal investigation. Once the IRS receives this request from ICE, the agency reviews it to determine whether it falls under an exception to the statutory authority requiring confidentiality and provides an explanation if the request cannot be processed.
But there are two big reasons why this MOU fails to pass muster.
“While the MOU references criminal investigations, DHS recently reportedly told IRS officials that ‘they would hope to use tax information to help deport as many as seven million people.’ That is far more people than the government could plausibly investigate, or who are plausibly subject to criminal immigration penalties, and suggests DHS’s actual reason for pursuing the tax data is to locate people for civil deportation, making any ‘criminal investigation’ a false pretext to get around the law.”
Second, it’s unclear how the IRS would verify the accuracy of ICE’s requests. Recent events have demonstrated that ICE’s deportation mandate trumps all else—with ICE obfuscating, ignoring, or outright lying about how they conduct their operations and who they target. While ICE has fueled narratives about deporting “criminals” to a notorious El Salvador prison, reports have repeatedly shown that most of those deported had no criminal histories. ICE has even arrested U.S. citizens based on erroneous information and blatant racialprofiling. But ICE’s lack of accuracy isn’t new—in fact, a recent settlement in the case Gonzalez v. ICE bars ICE from relying on its network of erroneous databases to issue detainer requests. In that case, EFF filed an amicus brief identifying the dizzying array of ICE’s interconnected databases, many of which were out of date and incomplete and yet were still relied upon to deprive people of their liberty.
In the wake of the MOU’s signing, several top IRS officials have resigned. For decades, the agency expressed interest in only collecting tax revenue and promised to keep that information confidential. Undocumented immigrants were encouraged to file taxes, despite being unable to reap benefits like Social Security because of their status. Many did, often because any promise of a future pathway to legalizing their immigration status hinged on having fulfilled their tax obligations. Others did because as part of mixed-status families, they were able to claim certain tax benefits for their U.S. citizen children. The MOU weaponizes that trust and puts immigrants in an impossible situation—either fail to comply with tax law or risk facing deportation if their tax data ends up in ICE’s clutches.
This MOU is also sure to have a financial impact. In 2023, it was estimated that undocumented immigrants contributed $66 billion in federal and payroll taxes alone. Experts anticipate that due to the data-sharing agreement, fewer undocumented immigrants will file taxes, resulting in over $313 billion in lost tax revenue over 10 years.
This move by the federal government not only betrays taxpayers and erodes vital trust in necessary civic institutions—it also reminds us of how little we have learned from U.S. history. After all, it was a piece of legislation passed in a time of emergency, the Second War Powers Act, that included the provision that allowed once-protected census data to assist in the incarceration of Japanese Americans during World War II. As the White House wrote in a report on big data in 2014, “At its core, public-sector use of big data heightens concerns about the balance of power between government and the individual. Once information about citizens is compiled for a defined purpose, the temptation to use it for other purposes can be considerable.” Rather than heeding this caution, this data-sharing agreement seeks to exploit it. This is yet another attempt by the current administration to sweep up and disclose large amounts of sensitive and confidential data. Courts must put a stop to these efforts to destroy data privacy, especially for vulnerable groups.
Remember the Lois Lerner scandal? For years, it was the Republican party’s Exhibit A of Obama administration overreach — proof that Democrats were weaponizing the IRS to target conservative groups. The outrage was endless. The GOP-led congressional investigations were relentless. The rhetoric about threats to democracy was breathless.
Funny thing about that: it turned out the IRS was actually investigating both conservative AND progressive groups equally. But never mind that — the principle was clear. Using the IRS to target organizations based on their viewpoints was an unconscionable abuse of power that undermined the very foundations of our system.
It should never, ever be allowed to happen.
Unless, apparently, you’re Donald Trump and you just… declare you’re going to strip Harvard of its tax-exempt status. Because you feel like it.
There’s some history here: if you want to set up a non-profit to help sick puppies, you set up a 501(c)(3) and you need to file detailed public reports and reveal all your donors. But if you want to set up a “social welfare” group that funnels unlimited dark money into political campaigns? Well, that’s what 501(c)(4)s are for. Sure, there are theoretical limits on their political activities. But in practice, after Citizens United, these groups became a favorite tool for moving vast sums of money through the political system while keeping donors anonymous. This isn’t all (c)(4)s, mind you, but after Citizens United, the market got flooded with new (c)(4)s whose purpose was almost certainly dark money laundering.
Thus, the IRS had a legitimate question on its hands: were these actually “social welfare” organizations, or just vehicles for campaign finance?
They began investigating whether or not they violated the laws that required them to (1) be for “social welfare” and (2) not engaged in excessive political activity. In dealing with the flood of new applications, some lower level employees started looking for keywords in reviewing applications. Some of those keywords were certainly coded to be about right-leaning organizations.
In the end, though, a non-partisan investigation found that the IRS equally targeted conservative and progressive startup non-profits during this time. It’s just that the GOP (as it’s been known to do) only talked about and focused on the searches that impacted conservative groups. There was a criminal investigation by the DOJ into Lerner, which closed with no charges being filed.
You would think that the Republicans who raised such a shitstorm about all that for years on end might have something to say about Donald Trump doing the same thing but actually doing it, and doing it out loud while making it entirely clear that it’s to punish organizations that are pushing back on his dictatorial authoritarianism?
President Donald Trump on Thursday ramped up his threats to scrutinize the tax-exempt status of groups and colleges he disagrees with, calling out a prominent organization that’s fighting some of his actions in court.
Trump told reporters “we’re looking at” Citizens for Responsibility and Ethics in Washington (CREW), a nonprofit watchdog group that has launched litigation against his executive actions and conducted investigations into what it alleges are his conflicts of interest.
“The only charity they had is going after Donald Trump. So we’re looking at that. We’re looking at a lot of things,” Trump said.
Again, federal law prohibits this (in theory). 26 USC 7217 says that the executive branch cannot influence IRS investigations. One problem, though, is that thanks to the Supreme Court’s ridiculous ruling in Trump v. United States, that law does not apply to Donald Trump as President, so long as he can make some claim to having done these things as part of his official responsibilities. It might not protect others within the administration, though.
Let’s parse this carefully:
The IRS under Obama looked for keywords to identify potentially illegal political activity
Republicans called this an unprecedented abuse of power
Trump is now explicitly saying he’ll strip tax-exempt status from groups that criticize him (not for actually violating the law)
So to recap: What the GOP spent years claiming Obama did (but didn’t actually do) is exactly what Trump is proudly announcing he’ll do. Except, unlike in the Obama administration which was cleared of any wrong doing, Trump appears to be actually quite directly violating the law. But, also unlike Obama, Trump actually has legal cover to do it thanks to John Roberts.
The truly wild thing here isn’t just the hypocrisy — though that’s breathtaking enough. It’s the complete inversion of reality: Some questionable keyword filtering by low-level IRS employees (applied to both conservative and progressive groups) triggered years of congressional investigations and demands for criminal prosecution. But when Trump explicitly announces plans to weaponize the IRS against his critics? Just another Thursday.
We’ve moved beyond simple double standards into a world where the same people who claimed that imperfect bureaucratic procedures were an existential threat to democracy are now actively cheering as their leader promises to do what they falsely accused Obama’s IRS of doing — but this time with explicit political targeting and presidential blessing.
Yes, that’s true of so much these days, but we should at least document these examples, for when this fog of bullshit and nonsense finally lifts and people ask “how did we get here?”
